The invention relates to a securities trading order management system that is capable of allowing an authorized user to place and execute orders for trades of various types of securities (e.g., stocks, bonds, futures, options, derivatives etc.) in real time. More particularly, the invention is directed to a method of operating such an order management system to incorporate real time financial market data and real time financial market access for trading, while also providing critical pre-trade and post-trade operators to protect the value of a user's investment portfolio.
Before the availability of high speed data send and receive connections, brokers and traders were forced to limit their securities trading activity exclusively to the financial exchange market floor. It was not possible to engage in remote site trading over the internet as available at the time because of slow connection times that would most certainly hinder effective trading. However, with the increasing availability of high speed data communication lines over which it is possible to send and receive data sufficiently in real time, it has become more feasible to implement electronic trading. This has opened up the doors for those in the financial securities trading field to a whole new specialty of participating in the trading of securities in remote exchange markets.
A number of management systems exist that allow for electronic securities trading based on the internet. For example, U.S. Pat. No. 6,014,643 is directed towards an interactive securities trading system that is connected to a communication network of users. The trading system matches a first user that places an offer to sell a certain security with a second user that has requested to buy that particular security. Once the second user has communicated the intent to buy at an agreed upon price, the first user has the option to accept, and if accepted, then funds are automatically withdrawn from the second user's bank account and deposited into the first user's bank account. This invention provides a useful system for matching up buyers and sellers by creating a direct network environment; however, it lacks the capability to run any sort of risk analysis to aid a user's decision to buy or sell a security.
In addition to the pure speed of the data connection available, it is essential for an order management system to have an easy-to-use user interface that will further aid in quick and efficient order transactions. As an example, U.S. Pat. No. 6,766,304 is directed to one type of user interface, a graphical window viewing interface, provided for a user to access an electronic exchange trading environment. While providing an efficient user interface succeeding in its ease of use, this invention still lacks the capability to run risk analysis on a user's trade to determine a grade of risk, and it does not offer any post-trade analysis for suggesting a next possible trade from a user's portfolio.
While the introduction of high speed internet connections has been integral in the new age of electronic trading of securities, it has also resulted in an increased amount of competition between the brokerage and trading firms to take full advantage of the near real-time speeds of these electronic systems and try to put as many orders through at once. The current state of the art is lacking in this aspect for being limited to single order management and not having the capability to handle multiple complex trade orders at once.
The current invention is an order management system able to overcome the shortcomings of the prior art by integrating pre-trade operators to handle compound order management and post-trade risk analysis to update the state of a user's most current investment portfolio.